vikramlamhe
107

Dear Friends,

I am reproducing the text of Sec 2 A of the Payment of Gratuity Act. I need following clarifications

1 What is continuous service ?

2 Suppose an employee joined a company 16th Feb,1997 & left on 17th March,2002. His actual present days are

180 days in 1997

above 240 in each year 1998,1999,2000,2001

Is he eligible for gratuity ?

There is no service break



[2A. Continuous service.- For the purposes of this Act,-

(1) an employee shall be said to be in continuous service for a period if he has, for that period, been in uninterrupted service, including service which may be interrupted on account of sickness, accident, leave, absence from duty without leave (not being absence in respect of which an order 2[***] treating the absence as break in service has been passed in accordance with the standing orders, rules or regulations governing the employees of the establishment), lay-off, strike or a lock-out or cessation of work not due to any fault of the employee, whether such uninterrupted or interrupted service was rendered before or after the commencement of this Act;

(2) where an employee (not being an employee employed in a seasonal establishment) is not in continuous service within the meaning of clause (1), for any period of one year or six months, he shall be deemed to be in continuous service under the employer-

1. Ins. by Act 26 of 1984, sec. 4 (w.e.f. 11-2-1981).

2. The words "imposing a punishment or penalty or" omitted by Act 22 of 1987, sec. 3 (w.e.f. 1-10-1987).

(a) for the sail period of one year, if employee during the period of twelve calendar months preceding the date with reference to which calculation is to be made, has actually worked under the employer for not less than-

(i) one hundred and ninety days, in the case of any employee employed below the ground in a mine or in an establishment which works for less than six days in a week; and

(ii) two hundred and forty days, in any other case;

(b) for the said period of six months, if the employee during the period of six calendar months preceding the date with reference to which the calculation is to be made, has actually worked under the employer for not less than-

(i) ninety-five days, in the case of an employees employed below the ground in a mine or in an establishment which works for less than six days in a week; and

(ii) one hundred and twenty days, in any other case.

1[Explanation.- For the purpose of clause (2) the number of days on which an employee has actually worked under an employer shall include the days on which.-

(i) he has been laid-off under an agreement or as permitted by standing orders made under the Industrial Employment (Standing Orders) Act, 1946 (20 of 1946), or under the Industrial Disputes Act, 1947 (14 of 1947), or under any other law applicable to the establishment;

(ii) he has been on leave with full wages, earned in the previous year;

(iii) he has been absent due to temporary disablement caused by accident arising out of and in the course of his employment; and

(iv) in the case of a female, she has been on maternity leave; so, however, that the total period of such maternity leave dose not exceed twelve weeks.]

(3) where an employee, employed in a seasonal establishment, is not in continuous service within the meaning of clause (1), for any period of an year or six, months, he shall be deemed to be in continuous service under the employer for such period if he has actually worked for not less than seventy-five per cent. Of the number of days on which the establishment was in operation during such period.]

COMMENTS

Mere absence cannot be said to result in breach of continuity of service for the purpose of the Act; Kothari Industrial Corporation v. Appellate Authority (Deputy Commissioner of Labour), Karnool, 1998 LLR 223.

From India, Delhi
VIPUL
2

Dear vikram,
Your Question contains ,reply it self about continous service defination.
while going through case you presented, similar case happened in my previous organisation, but while discussing with our legal advisor, he has opined that , the employee should be given amount of gratuity, where no service break is there, irrespective of less than 240 days in earlier year, if there are no action taken against him, by issueing, show cause & subsequent inquiry, while considering eligibility last year of working is important but when employee who have worked less than 240 in the 5th year of his service he should not eligible to get Gratuity amount. so we have paid the amount to employee.
I am sharing this experience , but there might be difference of opinion of advocate and professionals.
regards,
Vipul S. Rana

From India, Thana
VIPUL
2

Dear Vikram
There are several judgement on grautity , pl.refer latest judgment i don;t remembere the reference no. of judgement, but it is decided in one of the case , while calculating 240days Leave without pay or abseentiesm, leave enjoed , weekly off and laid off if any should be taken into account .
but here case is slighlty diffrent , its less than 240days in the first year of service, while in above case the matter is to be decided on last year's working days.
But as far as my knowledge goes the employee is eligible for the gratuity, because the court will considered the main aim of the act , i.e loyality bonus for the long tenure of the servicee with organisation.
Pl. add your comment on this.
regards,
Vipul S. Rana

From India, Thana
murtuzaghee
Dear Sir,
My company is 5 year old, one lady worker has left the company, mean to say, i have told not to come because she use to be absent for 20 days without informing after every six month, i told her several times and warn her regarding the same but she did not listen and one day i have to tell her no.
from Diwali TO Diwali her attendance is as under
2010 - 169 days
2011 - 295 days
2012 - 286 days
2013 - 250 days,,, but in march she left the job due to her household problem, but in mid April she requested me to rejoin her and i accepted her request, but she did not improve her habits and in 2014 she attended 230 days,
then i told her not to come, is she liable for grautity. please help me and advise me

From India, Mumbai
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